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4 January, 2015

Reforming Ukraine

More than ever Ukraine needs statesmen with a long term vision looking beyond the horizon of their current mandate

2014 - annus horribilis for Ukraine. However, a year of hope as well. New nation with citizens well aware of their power and rights emerged. The times of crisis offer unique momentum for in-depth, rapid and irreversible transformations of politics and economy. Today they are matched up with hunger for change in Ukrainian society and with Maidan’s inspiring spiritual force to transform the post-Soviet and oligarchic system. Ukraine, assisted by its international friends and partners from the democratic world, has a chance to lay the fundament for a new future. The prerequisite for reforms is always peace. I hope very much that Ukrainians will enter into 2015 with a sense that a peaceful solution to the conflict is emerging.

Among the best of insurances against any attempts to undermine the sovereignty and unity is to build a strong democracy and an efficient economy. The new Ukrainian leadership has a mandate of citizens to embark on serious, country-changing reforms. There is a broad understanding of priorities and urgencies to be addressed: from banking sector, fight against corruption and energy efficiency; from the rule of law to the empowering of regional and local structures. The EU and other international partners are determined to assist Ukrainian leadership and society in carrying out these wide-reaching reforms. Yet assistance will only be effective if there is a resolute action by the Ukrainian leadership and a clear ownership to the reform process.

For any country a reform process is very difficult and often – very painful. Ukraine may dispose of experience gathered by EU member states while reforming different sectors. Ukraine should not be considered as an exception from history and from basic laws of economy. Ways of reforming experienced by other countries can be applied in Ukraine as well. In short term, emphasis should be put on decisions that do not preclude long term strategies as set by the Ukrainian President and supported by Parliament: with an aim to be able by 2020 to fulfill criteria for being considered as a candidate country to the European Union. The Association Agreement that entered into force on November 1, 2014 constitutes a guideline for many of much needed reforms. The European Union will offer its assistance to Ukraine to go along this road. 

However, reforms should be explained to the society and carried out in a constant open dialogue with representatives of various branches of Ukrainian civil society, industry, business and administration. In order to ensure public support for reforms, their burden and costs must be calculated in a way that protects the most vulnerable citizens.

For many Ukrainians, the European Union is an ideal along which democracy, rule of law and free market loving society should develop. On many occasions, local authorities have also declared that the EU-Ukraine Association Agreement will serve them as a national roadmap and toolbox for a broad range of reforms. Today reforms are mostly needed for Ukraine itself in order to unlock the potential of Ukrainian economy and of Ukrainian brains. If fully implemented, such reforms would first and foremost develop Ukrainian internal market and make the country’s agricultural and industrial exports compliant with European standards, opening up doors to the world’s largest single market. If successful on European markets -Ukrainian goods will also be successful on larger global markets. A well-functioning Ukrainian economy would then attract large international investments.

Rome was not build in a day and Ukraine will not be reformed easily and rapidly. A comprehensive vision must go beyond the immediate crisis by addressing reforms related to the Constitution, election laws and decentralization – all to strengthen Ukrainian statehood for the future. It must also tackle issues that do not fall in the immediate remit of Association agenda, like reforming complex and business-unfriendly taxes system, making labor markets more flexible by introducing easier hiring and firing practice and by supporting lifelong employees training.

As my friend and former European Commissioner Janusz Lewandowski once observed -- successful reformers rarely win next elections. More than ever Ukraine needs statesmen with a long term vision looking beyond the horizon of their current mandate. A re-born nation will rally behind those who will embark on such a reform path and people will reward those courageous politicians. Examples for similar historical achievements are provided by some neighboring countries of Ukraine, which embarked on the reform paths in the 1990s. 25 years ago they shared almost with the same level of GDP with Ukraine, only to see it quadrupling in comparison to Ukraine in 2014.  None of these countries found itself in such a dramatic situation as Ukraine today. However, with the aim to construct a new future for Ukraine, well implemented reforms should be seen as an important firewall for the protection of the borders. 


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